HomeMy WebLinkAbout1998-12-16 99-38 ORDERCOUNCIL ACTION
Item No. 99-38
Date December 16, 1998
Item/Subject: Authorizing Execution of Three Party Agreement with
Realty Resources Chartered and Citizens Bank of New Hampshire
Relating to Freese's Building Redevelopment Project
Responsible Department: Legal
Citizens Hank of New Hampshire is the construction lender to Realty
Resources Chartered, for redevelopment of the lower three floors of
the front portion of the former Freese's building. Citizens Bank
will be lending up to $1.95 million in construction financing, to
be replaced in December 1999 by $1.934 million in permanent
financing previously approved by the City of Bangor. As part of
the documentation for its construction loan, Citizens Bank has
(cont'd on next page)
Associated Information: Order, Three Party Agreement
Finance
CityMA Y(/
For
Passage
First Reading
Referral Page 1 of 1_
Departsent
Head
Manager's
Comments: `1
A
Associated Information: Order, Three Party Agreement
Finance
CityMA Y(/
For
Passage
First Reading
Referral Page 1 of 1_
asked Realty Resources and the City to sign a "Three Party
Agreement." Under the agreement, the City (1) confirms that it has
approved $1.934 million permanent financing for this portion of the
project, and that the City will disburse its loan funds no later
than December 31, 1999, subject to the conditions of our loan
commitment letter and loan documents; and (2) agrees to provide
notice to Citizens Bank of any default by Realty Resources. The
agreement does not materially alter any terms or conditions of the
City's loan commitment or Obligations to Realty Resources.
The attached Order would authorize execution of the Three Party
Agreement. I have reviewed the agreement, and recommend Council
approval.
AB AIQ n
Aeeigaed to Councilor Crowley December 16, 1998
CITY OF BANGOR
QITLE) (Order Authorizing Execution of 'Three PartyAgreement with
net Yartmers. LLC and Citizens Bank of New Hampshire
Relating to Freese's Building Redevelopment Project
By iA City Coutwil of tie City of Deaver:
ORDERED,
THAT
the City Manager is hereby authorized, on behalf of
the City of Bangor, to execute a "Three Party Agreement" with
] Partnere. LLC and Citizens Bank of New Hampshire,
substantially in the form attached, to provide assurances in
connection with the financing of a portion of the Freese's Building
redevelopment project.
IN CITY COUNCIL
December 16, 1998
Passed
A True Copy, Attest:
CITY CLERK
AAisaed to Coaoeiloe Crowley December 16, 1998
CITY OF BANGOR
QnW (orb 1p Authorizing Execution of Three Party Agreement with
Realty Resources Chartered and Citizens Bank Of New Hampshire
Relating to Freese's Building Redevelopment Project
BY tM City Cor wH of W City ofApsMr.
ORDERED,
THAT
the City Manager is hereby authorized, on behalf of
the City of Bangor, to execute a "Three Party Agreement" with
Realty Resources Chartered and Citizens Bank of New Hampshire,
substantially in the form attached, to provide assurances in
connection with the financing of a portion of the Freese's Building
redevelopment project.
IN CITY COUNCIL
December 16, 1998
Notion to Amend by Substitutiong the
words "MC Partners, INC whatever the
words Realty Resources Chartered"
appears Nation Seconded
Passed as Amended
f
CI a
99-38
ORDER
Title,Authorizing Execution of Thies
Party Agreement with Realty Resources
Chartered end Citizens sank of New
Redevelopment
...... lopnen[ Project
......................................
a.
AmAgned to
..................... ..... .
THREE PARTY AGREEAENT
RePermanent Loen
THIS AGREEMENT is made and entered into by and among CITIZENS BANK
NEW HAMPSHIRE, aNew Hampshire Bank with a principal place of business at 100
Middle Street, Pardee, Maine 04101(the "Seeds"), the C1TY OF BANGOR MAINE, a
Maine municipal corporation (the Temsman Lenten"), and REALTY RESOURCES
CHARTERED, a Maine corpomtiom (the'Borrower") having its principal place of business
and mailing address at 247 Commercial Strew, Rockport' Maine 04856 (the "Borrower").
RECITALS:
A. The Borrower is the owner of Unit #1 in the Freese Building C;rmominirm presently
consisting ofthe lower three Boors in the former Freese Building Maine Street, located
in the City of Bangor, Maine, and more particularly described in Exhibit A attached
hereto and made a part ofthis Agreement (the "Land"). The Borrower intends to
renovate Udt #1 into 45,000 N, ft. of commercial shell space (the "Improvem nW).
The Land and the Improvements are hereinafter collectively referred W as the "Project".
B. The Improvements are to be renovan d and completed substantially in accordance with
the plans and specifications prepared by Curtis, Walter, Stewart Architects identified in
Exhibit B (the "Plans and Specifications"), the budget and and estimates attached
herm as Exhibit B-1 and the terms of the Construction Loan Agreement, dated
December 1998 between the Bank and the Borrower (the "Communion loan
Agreement").
C. The Bank has agreedto make a loan to the Borrower in the principal mount of an to
ONEMR,WONNNEHUNDREDFHiTYTHOUSAND arrimVINDOLLARS
($1,950,00000)(the "ConsmmctionloW)for the construction ofthe Improvements
and the payment of certain related costs and expenses. The Construction Loan will be
advanced to the Borrower under the terms of the Construction Loan Agreement, and
will be evidenced by a note that will be seared by, among other things, a cannon
Mortgage, Security Agreement and Financing Statements, a Collateral Assignment of
Leases and Rents with a Collateral Assignmat of Project Documana (the "Security
Deed") encumbering the Project and certain related personal property' of the Borrower.
D. The Borrower has obtained a commitment from Penmacnt Leader for permanent mortgage
toms on the Project in the collative total amount of $1,934,300 00 consisting of a
$1,534,300 bear and a$400,000 loan(collectively the "Permanent Loan"). The
Conmdtncnt is evidenced by a Inter from Permanent Leader to the Borrower, dated on or
about September 29, 1998 (the "Commitment"), a copy of which is attached hereto as
Exhibit C.
E. The making ofthe Conservation Loan by the Bulk is contingent upon the agreement of
Paramount Lender to provide permanent financing for the Project by making Permanent
Low to the Borrower upon completion of construction of the Improvements in
accordance whh the terms of the Construction Loan Agreement and in wmphanse with
the terms of the Commitment and this Agreement.
F. This Agreement is bang executed to coordinate the aforesaid financing arrangements.
M ORDER TO Pvfl) ENT the above facts and understaMings, and for good and
valuable consideration, the receipt and sutficieucy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Fundhne of Permanent Loan. When the terms of the Commitment have been
complied with (or waived by Permusent Lender), Permanent Loan will be closed by the
exeumon aad delivery by the Bonower directly to Permanent Lender of new Icer
documents
The $1,934,300 proceeds ofPermamera Loan will be advanced directly by Permanent
Leader to the Bank to the extent required to pay and satisfy the Construction Loan.
2. The Cbsine Date
(a) The funding ofPermenem Loan will be consummated on or before the date
specified in the Commitment for its expiration, namely December 31, 1999 (the "Closing
Date-).
(b) The Closing Date may be extendd by onmen agreement between the Bank and
Procurator Lender, and any such agreement will bind the Borrower as if it were a party to
that agreement, provided that Borrower may enforce the Commitment if au conditions have
been satisfied.
(c) Nothing in this Agreemeat or in the Commitment will be construed to prevent the
Closing Date from occurring eazGer than the expiration date specified in the Commitment.
3. Laaa Documents. Thefomaofthe Perrnanent Loandommentsidentlfiedin
Exhibit D have been agreed to by the Borrower and Permanent Lender. The forms of any
additional loan documents that we required by the Commitment must be idemiLed in Exhibit
C and agreed upon by the parties prior to the fust advance of any proceeds of the
Construction Loan by the Bank unless the Bahr waives that requirement. The approved
forms of Permanent loan documents required by Permanent Commitment may rent be
amended without die prior written consent of the Bank and Pennmwm Lender,
E. The making ofthe Conservation Loan by the Bulk is contingent upon the agreement of
Paramount Lender to provide permanent financing for the Project by making Permanent
Low to the Borrower upon completion of construction of the Improvements in
accordance whh the terms of the Construction Loan Agreement and in wmphanse with
the terms of the Commitment and this Agreement.
F. This Agreement is bang executed to coordinate the aforesaid financing arrangements.
M ORDER TO Pvfl) ENT the above facts and understaMings, and for good and
valuable consideration, the receipt and sutficieucy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Fundhne of Permanent Loan. When the terms of the Commitment have been
complied with (or waived by Permusent Lender), Permanent Loan will be closed by the
exeumon aad delivery by the Bonower directly to Permanent Lender of new Icer
documents
The $1,934,300 proceeds ofPermamera Loan will be advanced directly by Permanent
Leader to the Bank to the extent required to pay and satisfy the Construction Loan.
2. The Cbsine Date
(a) The funding ofPermenem Loan will be consummated on or before the date
specified in the Commitment for its expiration, namely December 31, 1999 (the "Closing
Date-).
(b) The Closing Date may be extendd by onmen agreement between the Bank and
Procurator Lender, and any such agreement will bind the Borrower as if it were a party to
that agreement, provided that Borrower may enforce the Commitment if au conditions have
been satisfied.
(c) Nothing in this Agreemeat or in the Commitment will be construed to prevent the
Closing Date from occurring eazGer than the expiration date specified in the Commitment.
3. Laaa Documents. Thefomaofthe Perrnanent Loandommentsidentlfiedin
Exhibit D have been agreed to by the Borrower and Permanent Lender. The forms of any
additional loan documents that we required by the Commitment must be idemiLed in Exhibit
C and agreed upon by the parties prior to the fust advance of any proceeds of the
Construction Loan by the Bank unless the Bahr waives that requirement. The approved
forms of Permanent loan documents required by Permanent Commitment may rent be
amended without die prior written consent of the Bank and Pennmwm Lender,
4. Completion a Construction. Upon completion ofwrawmion of the
Improvements in accordance with the Plans and Specifications and the Construction Loan
Agreement, the Benk and the Borrower agree to deliver w Permarimt Lender written notice
of such completion and of proposed time for the closing ofPennatmnt Loan, which must
beat least 15 days following the date of that nonce and most not be later than the Closing
Date. Such comes may be given at any time prior to the Closing Date. On the date specified
in the notice, or on any earlier or later date agreed to by the parties, the Permanent Loan will
be funded n contemplated by this Agreement so long as all conditions of such funding sen
forth in the Commitment and this Agreement have been fulfilled.
S. Defaults of Borrower.
(a) Permanent Lender agrcea w give the Bank ad the Borrower prompt writtm
notice of my default athe Botrower in complying with the terms and conditions of this
Agreement, or the Permanent Commitment. The Bank and the Borrower will have 30 days
after receipt of any such tmfice of default to are all defaults, except that an web period for
core will Word the Closing Date without the prior written consent of Permanent Lender.
(b) Usury Event of Default arises under the Construction Loan Agreement and related
documents cams, the Bahr agrees to give prompt whom notice of the erdstence and nature
of such Evem ofDefaot to Permanent Lender. The Bank agrees to accept performance
from Pemanent Lender on behalf of the Borrower with the applicable grace period if any
under the Construction Loan Agreement.
G Covenants of Borrower. The Borrower will proceed diligently With the
conmussion of the Improvements in accordance with the Plans and Specifications and the
Construction Loan Agrement, and will not seek to do anything that will hinder or fruatmte
the making ofPermmerd Loan by Permvrent Leder. The Borrower will cooperate m all
times to wrisummate the dosing of Permanent Lom, and will provide all information and
materials and execme ad deliver all documents that are necessary to consummate
Permanent Loan under the terms of the Commitment and this Agrmaoem.
9. Representations of Permanent Lender. By the execution of this Agreement,
Permanent Lender represents that:
(a) the Commitment is in full force and effect, and permanent Lender bar received the
payment in full of all other fees due Permanent Linder under the Commitment,
excluding reimbursement of expenses incurred after the date of this Agreement
(b) it has reviewed and approved the Plans and Specifications for the Project;
(c) it has reviewed and approved the cost estimates and budget for the Project;
4. Completion a Construction. Upon completion ofwrawmion of the
Improvements in accordance with the Plans and Specifications and the Construction Loan
Agreement, the Benk and the Borrower agree to deliver w Permarimt Lender written notice
of such completion and of proposed time for the closing ofPennatmnt Loan, which must
beat least 15 days following the date of that nonce and most not be later than the Closing
Date. Such comes may be given at any time prior to the Closing Date. On the date specified
in the notice, or on any earlier or later date agreed to by the parties, the Permanent Loan will
be funded n contemplated by this Agreement so long as all conditions of such funding sen
forth in the Commitment and this Agreement have been fulfilled.
S. Defaults of Borrower.
(a) Permanent Lender agrcea w give the Bank ad the Borrower prompt writtm
notice of my default athe Botrower in complying with the terms and conditions of this
Agreement, or the Permanent Commitment. The Bank and the Borrower will have 30 days
after receipt of any such tmfice of default to are all defaults, except that an web period for
core will Word the Closing Date without the prior written consent of Permanent Lender.
(b) Usury Event of Default arises under the Construction Loan Agreement and related
documents cams, the Bahr agrees to give prompt whom notice of the erdstence and nature
of such Evem ofDefaot to Permanent Lender. The Bank agrees to accept performance
from Pemanent Lender on behalf of the Borrower with the applicable grace period if any
under the Construction Loan Agreement.
G Covenants of Borrower. The Borrower will proceed diligently With the
conmussion of the Improvements in accordance with the Plans and Specifications and the
Construction Loan Agrement, and will not seek to do anything that will hinder or fruatmte
the making ofPermmerd Loan by Permvrent Leder. The Borrower will cooperate m all
times to wrisummate the dosing of Permanent Lom, and will provide all information and
materials and execme ad deliver all documents that are necessary to consummate
Permanent Loan under the terms of the Commitment and this Agrmaoem.
9. Representations of Permanent Lender. By the execution of this Agreement,
Permanent Lender represents that:
(a) the Commitment is in full force and effect, and permanent Lender bar received the
payment in full of all other fees due Permanent Linder under the Commitment,
excluding reimbursement of expenses incurred after the date of this Agreement
(b) it has reviewed and approved the Plans and Specifications for the Project;
(c) it has reviewed and approved the cost estimates and budget for the Project;
99-38
(d) Borrower has received ell necessary approvals acrd permits Gom the City of
Bangor and the Maine Historic Preservation Commission;
(e) it has reviewed and approved the tames of Construction Contract between Pen Bay
Builders, Inc. and Borrower dazed 1998;
(f) it bas reviewed end approved title ins irewe commitment dated as of August )
1998 issued by Corrmomvealth Title Insurance Comparry and agrees to accept in
satisfaction of the title insurance requirements of the Commitment an ALTA
mortgagee form of fide insurance policy issued by Commonwealth Title Insurance
Company in the amount ofPermment Loan, showing fee title in the Project vested
in the Borrower and insuring Permanent Landers Mortgage and Security
Agreement as a first ban on the Project, subject orgy to bcd property tuxes and
assessments that are a lien but are not yet delinquent, matters shown on the survey
described in clause (d) below, and the exceptions shown on Schedule B which are
to be discharged or satisfied at closing;
(g) it has reviewed and approved the survey of the project Land entitled 'Land Title
Survey/Condomitdum Plat "dated prepared by
inc. and agrees to accept the survey and lever reports in
satisfaction of the requirements ofthe Commitment;
(h) it has reviewed and sprayed the Plans and Specificmione
(i) it has reviewed and approved the Phase I Unviromnenm] Site Assessment report
dated 1998, prepared by and agrees that such
report satisfies the requirements of the Commihnenr and
Q) it has reviewed and approved the opinion letter, dated 1998
from Drummond Woodsum & MacMahon to the Banic and Permanent Lender, and
the accompanying evidence of Borrower's existence and authority to enter into
the Permanent Wan.
The following conditions precedent remain to the funding of the Permanent Loan:
(a) Completion of the Improvements in accordance with the Plans and Specifications
and applicable federal, state, saM city laws, ordinances and building codes;
(b) Inspection by the City of the Improvements and related books, records, warrants,
materials, equipment, payrolls and conditions ofemploymerd;
(c) Use of the Construction Loan proceeds in accordance with the approved budget
and cost estimates, and the payment by Borrower of my cog overruns.
(d) Receipt of hazard and liabilityinsurance satisfactory to Permanent Lender in the
mount of which may be insurance carried by the Freese
Building Cmldominlmn Association;
10. Amendments. No amendment or modification of the Commitment after the date
of this Agreement will affect any obligations of the parties under this Agreement unless that
amendment or modification is approved in writing by all parties to this Agreement. This
Agreement may be amended only by a written instrument signed by all of the parties.
11. Notices. All rmtices under this Agreement must be givem in writing and will be
considered to have been duly and properly served upon personal delivery to the party or an
officer of the party being served, or if mailed, upon the that to occur of actual receipt or the
expiration of forty-eight (48) hours after deposit in United Stares reginered or cmdfied mail,
postage prepaid, addressed to the parties as follows:
Borrower: Realty Resources Chartered
Ann William Shanehma
247 Commercial Street
Rockport, Mane W856
permanent Lender: Erik M. Stumpfel, City Solicitor
CITY OF BANGOR
73 flarlow Street
Bangor, Maine 04401
Bank Thomas N. Les, Vice President
CITIZENS BANIC NFI
100 Middle Street
Penland, ME 04tol
Such addresses may be changed by notice to the other parties given in the same cancer as
provided above, such changes in address to be effective only upon receipt.
12. Termination. This Agreement will terminate upon the Funding of Permanent
Loan by Permmient Lender.
13. Counterparts, This Agreement maybe Merited in my mamba ofwunteryms
by the parades. Each of the counterparts will be considered an oral, and all counterparts
wdt cormthme by one and the same instrument.
ld. Waiver. No waiver of any of the terms or condhiorm of this Agreement, and no
waiver of airy default or failure ofwmpliancq shall be effective undws in writing, and no
waive fuatished in writing shall be deemed to be a wniver of any other tam or provision or
any future condition of this Agreement.
15. Miscellaneous . This Agreement will be governed by the laws of the State of
Maine. The invalidity or unenforceability of my provision of this Agreement wit not affect
anywhaprovuion. The captions of the Paregmphs of this Agreement are for oomenience
only and do not limit my terms or provisions. In the event that my mit or action is brought
w enforce this Agreement the prevailing party or parties will be emitted to received from
the losing party or parties all costs of the proceedings and reasonable attorneys' fees in an
amount fared by the court.
This Agreement may be separaWy executed in counterpart originals.
IN WITNESS WIIERE, the Bank Permanent Lender and the Borrower have
executed this Agreement under seat as ofTIecanber .1998.
Bank:
CFI'IZENS BANK NEW HAMPSHIRE
By:
Witness its Vice President
Permanent Lender:
CITY OF BANGOR, MAINE
By:
its
Borrow":
REALTY RESOURCES CHARTERED
By:
its President
W
99-38
IRC MMA
Unit No. 1 (the "Until") in THE FREESE HUILDING CONDOMINIUM (the
"Comicarmium") showed] on Main Street N the City of Bangor, Penobscot County, Maine, as
more particularly described in the Declaration of The Freese Budding Condominium dated
December J 1998 and recorded in the Penobscot County Registry of Deeds m Book_
Page as the same may be amended from time to time in accordance with its tams and me
Ad (the "Declare ion")„ and on the Plat and Plans prepared by Inc. incorporated
into the Declension and recorded in the Penobscot County Registry of Deeds in Plan Book
Pages _ and � as the same may be amended from time to time in accordance with
the Declaration and the Ad (me "Plat and Plate"), by virtue of the recording of which
Declaration, Plat and Plans, REALTY RESOURCES CHARTERED and REALTY
RESOURCES CHARTERED, as Dedamits, created the Condominium moment to the Maine
Condominium Ad, Title 33 of the Maines Revised Statutes of 1964, as emended, Chapter 31,
Sections 1601-101, a see, as amended (the "Ad");
TOGETHER WITH an undivided interest in the Common Elements of the Condominium,
the liability for Common E mmaas of me Condominium, and Votes in the Association of Unit
Owners ofthe Condominium allocated to the Unit pursuant to the Decimation;
TOGETHER WITH the rights to use any Limited Common Elements allocated to the Unit
as described, specified and allocated pursuant w the Decimation;
TOGETHER WITH an eaumem in common with the owners of other units to use the
Common Elements of the Condominium for purposes of ingress, egress and all other uses in
accordance with the Declaration and the exclusive right and easement for the use, occupancy
and enjoyment of the Unit;
TOGETHER WITH an easement in common with all other unit Owners to use all pipes,
wires, duds, cables, conduits, public utility Imes and other Common Elements serving the Unh
and located in any of the other units;
TOGETHER WITH an eesemem, m the extent necessary, for structural and subjacent
support ova every aha unit and over the Common Elements;
TOGETHER WITH all aha rights, easements, rights-of-way, interests, Allocated
Interests, privileges and appurtenances as =to particularly described, located, defined, allocated
or referred to in the Decimation, the Plat and Plans, and the ByLaws described in the
Decimation, as the said By -Laws may be amended from time to time in accordance with the
Declaration and the AU (herein referted to as the "By Laws"), all of which are incorporated
herein by reference thereto;
SUBJECT TO the matters affecting title described in the Declaration ant the Plat and
Plans and the terms, covenants, agreernents, essemans and provisions of the Declaration and
Bylaws, which tenon, covenants, agreements, easements and provisions shall constitute
covenants running with the land and shell bind the Grantee and any Mann having at any time
any interest or estate in the Unit, as though such provisions were recited and stipulated at length
bereirg
SUBJECT ALSO To an easement in common with the Owners of other units to use all
pipes, wires, ducts, cables, conduits, public utility lines and other Common Elements serving the
ether units and located in the Unit and to an assonant for structural and lateral support in favor
of every other unit
99-38
PXWGIIT B
(Plans and Specifications)
EXHIBIT B-1
(Budget and Cost Estimates)
99-M
EXHIBIT C
(Permanent Loan Commitment)
99-38
EXHIBIT D
(Pere mlent I,aaY Documents)
A Permanent Loan Documents Ageed To'.
B. Permanent Loan Documents Requ ned by the Commitment, Int not yet agood to